Skip to comments.Lessons For US Citizens From The Deposit Confiscation In Cyprus
Posted on 03/17/2014 5:29:23 PM PDT by Nachum
Submitted by Simon Black of Sovereign Man blog,
It was almost exactly one year ago to the day that an entire nation was frozen out of its savings overnight.
Cypriots went to bed on Friday thinking everything was fine. By the next morning, they had no way to pay bills or buy food.
Its certainly a chilling reminder of how quickly things can change. And why.
The entire crisis sprang from a mountain of debt. The government had accumulated too much debt. The banking system had accumulated too much debt.
And banks had lost a lot of their customers money making risky, stupid bets on things like Greek government bonds.
By March 2013, Cypriot banks were almost entirely devoid of cash.
Sure, customers could log on to a website and check their bank balances.
But theres a huge difference between a number displayed on a screen, and a well-capitalized bank that actually holds abundant cash.
The government was too insolvent to bail anyone out. And as a member of the eurozone, Cyprus didnt have the ability to print its own money.
So they did the only thing they could think of confiscate customer deposits.
And they imposed capital controls on top of that to make sure that people couldnt withdraw their remaining funds out of the banks as soon as the freeze was lifted.
It was a truly despicable act. But again, even though it all unfolded overnight, the warning signs were building for at least a year. Especially the debt.
When countries, central banks, and commercial banks accumulate too much debt, and specifically too much debt relative to assets, you can be certain there is trouble ahead in the system.
Think about it like your own personal finances. If you have a million dollars in debt, that seems like
(Excerpt) Read more at zerohedge.com ...
Interesting note: yesterday the US “seized” a North Korean tanker that loaded oil from unapproved Libyan “rebels”, on orders from Cyprus.
Gold bullion coins (ounce and fractional ounce). Don’t forget the other precious metals, lead and brass. They will become cheap again, for a while, but they could become precious again at a moment’s notice as we all know.
Insolvency: : the fact or state of being insolvent : inability to pay debts
I know Obama is trying, but the government still has the ability to pay their debts.
As far as the Fed, what debts do they have?
How about Silver?
You are almost down to your last drop of gas, but you were able to coast into the parking lot of a truck stop. You approach a driver filling his tank with expensive diesel. You ask him if he could spare a few bucks so you could get down the road. He asks what you have to trade. You reply that you have some silver coins and you have some 9mm hollow points. Which one will he trade for gasoline money? If the past few years are any guide, the ammo will trump the silver.